2 ISAs opened in same tax year..

TrickyDicky

I already had a smile ISA this tax year, and opened another with A&L with the intention of transfering the small funds from my existing ISA over. But it turned out that I couldnt do that in the end (needed the money elsewhere).

I am going to close my Smile ISA when Ive finished switching all my banking to A&L, but this probably wont be till after the start of the new tax year. Will I be ok to start putting money into the ISA I recently opened with A&L after the start of the new tax year, or would I have to close it and open a new one in the new tax year?

steve_cov

Oddly enough I went into the A&L today, asking the same question but without the shifting-money-about element.

Existing A&L ISA holders can simply continue to move money into their A&L ISA once 6 April comes. There is no need to open a new account in the new tax year.

baldbloke_2

Cash ISAs all seem to operate the same rule these days. If you invest in successive tax-years to an existing ISA then it counts as the same ISA. if you miss a tax-year - or choose to save elsewhere for a year - then you have to reapply and have to open a new cash ISA with a different account number etc.

tanith

I am confused (it doesn't take much) I have a IF Isa which I initially put £3000 into and then saved £100 per month into it.... It is now worth over £5000.
Is all that money in one ISA or have I been using up subsequent years ISA allowance to save the extra £100 per month?.... Depending on the answer I may have another question :eek:

Kazza242

tanith wrote:

I am confused (it doesn't take much) I have a IF Isa which I initially put £3000 into and then saved £100 per month into it.... It is now worth over £5000.
Is all that money in one ISA or have I been using up subsequent years ISA allowance to save the extra £100 per month?.... Depending on the answer I may have another question :eek:

- When did you open the IF mini cash ISA?
- How much have you contributed to it this tax year (from 6th April 2005 - 5th April 2006)?
- How much have you contributed to it each tax year since you opened it?

If you have contributed more than £3,000, during any tax year, you have broken the Inland Revenue mini cash ISA rules. You would need to call the Inland Revenue.

If however, you have stayed within the £3,000 per tax year limit and have simply carried on your mini cash ISA by adding to it each new tax year, then you haven't done anything wrong.

Please note: Any interest accrued from your mini cash isa savings, does not count towards your £3,000 mini cash ISA allowance. The £3,000 limit applies to how much you can contribute per tax year.

tanith

I opened it March 2004 with £3000


April 2004 to March 2005 = £1200
April 2005 to March 2006 = £1200

now it amounts to something over £5000

I assume this is OK ?

If I want to open a new ISA with A & L (putting in £3000) now, I will have to stop the DD into my IF Isa ? so as not to exceed the £3000 limit

I hope I have this correct now...

Thanks

PoorPaul

tanith wrote:

If I want to open a new ISA with A & L (putting in £3000) now, I will have to stop the DD into my IF Isa ? so as not to exceed the £3000 limit

Yes, but not only must you NOT exceed £3000 in any year but you can only have a mini cash ISA with one provider in any tax year, so cancel that DD to be sure it doesn't pay in anything on or after April 6th.

However, you can have mini cash ISAs from different years with different providers (in your case IF and A&L) although it might be best to look at transferring your IF ISAs to A&L for a better rate once your A&L one is up and running ?

tanith

I think I have definately made a boob, I just checked and I did open the A & L Isa before the end of March (I haven't had any paperwork from them yet) I only managed to pay £300 into it (thats irrelevant I suppose) but it means I had the IF Isa and the A & L Isa active in the same year....

I have already cancelled the IF DD and asked for the monies to be transferred to the A & L Isa , heck I think I better get on the phone to them right now..... :eek:

tanith

I just rang A & L and she was very sympathetic and said lots of people make the same mistake, not realising they cannot contribute to two different ISA in the same tax year..... even though I am still under £3000 with both. She also said that IF will realise what I have done when they get the request to transfer their ISA to the A & L one and I guess inform the IR....

I feel such an idiot cos I have posted about it here and thought I understood the answer I got but I guess not....... what an idiot .....

She said to do nothing and I that I WILL BE HEARING FROM THE INLAND REVENUE.... :eek: I wonder if they will fine me , or slap my wrist or send me straight to the tower....... :eek:

I will not be telling OH

Kazza242

tanith wrote:

I just rang A & L and she was very sympathetic and said lots of people make the same mistake, not realising they cannot contribute to two different ISA in the same tax year..... even though I am still under £3000 with both. She also said that IF will realise what I have done when they get the request to transfer their ISA to the A & L one and I guess inform the IR....

I feel such an idiot cos I have posted about it here and thought I understood the answer I got but I guess not....... what an idiot .....

She said to do nothing and I that I WILL BE HEARING FROM THE INLAND REVENUE.... :eek: I wonder if they will fine me , or slap my wrist or send me straight to the tower....... :eek:

I will not be telling OH

I expect the first mini cash isa you opened will remain valid, but the second one will be made invalid and void. The Inland Revenue come across issues like this frequently, so I doubt they would take any further action than the above.